Alberta Politicians Back For Fall Session As Legislature Resumes

EDMONTON - Alberta Premier Jim Prentice laid out his vision Monday to keep spending low, save for the future, continue building roads, schools and senior care beds, and balance the budget — all with oil prices tanking at $75 a barrel.

Opposition critics called the plan either fantasy or a harsh reality soon to be realized at the expense of current Albertans or the generation to come.

Lt.-Gov. Don Ethell read out the plan in the speech from the throne to open the fall session of the legislature.

Prentice's government is facing a financial bind if oil prices, the wellspring of the provincial economy, don't rebound.

The province budgeted for the benchmark West Texas Intermediate to average US$95 per barrel this year. It is now hovering around $75. Each $1 drop in the price can average out to $215 million in lost revenue over a year.

Prentice has said this year's budget will be balanced. The treasury still has $5 billion in its rainy day fund.

The long-term financial plan will be announced later in the month but Prentice has warned that $75 oil will mean changes.

Ethell, in the speech, said the province must find a way to ensure that essential spending is not held hostage every year to the whims of oil prices.

"We must align spending with a realistic assessment of the financial capacity we can sustain responsibly, without risking the prosperity of our children and grandchildren."

Ethell said more spending is not the answer: "The rate of increase on spending for government operations will be kept below the rate of population growth (plus) inflation."

He said the solution will not come at the expense of building new schools and care home spaces to accommodate a rapidly growing province. If necessary the province will continue taking on debt, he said.

The debt is now at more than $10 billion and rising.

Ethell said the problem will not be solved by implementing a sales tax. Current taxes, he said, will be kept low.

Prentice has previously said he will not raise oil royalties to solve the problem or tinker with Alberta's 10 per cent flat tax on income.

Critics have said the flat tax is unfair, delivering disproportionate breaks to the wealthy at the expense of middle and lower income groups.

Prentice has backed away in recent days when asked if his promise to not touch the flat tax is still in force.

When asked again Monday, he said: "Albertans value the fact we have no sales tax in this province. I share that point of view. I think there are other solutions to the circumstances that face us."

Opposition NDP Leader Rachel Notley said while Prentice is premier, his government is still beholden to the promises made by the PCs in the 2012 election to invest in social programs, education, health and take steps to reduce poverty.

Notley said by keeping spending below the rate of inflation plus population, the Tories are laying the groundwork for spending cuts.

"It's clear to me that this premier has decided to act like a wealthy banker and essentially ignore the needs of regular Alberta families," said Notley.

Liberal Leader Raj Sherman agreed: "The PCs have been building this province on the backs of students, our seniors, and Albertans waiting to get into health care."

Wildrose Leader Danielle Smith's caucus has pushed the Tories to develop a plan to get spending in line and to stop taking on debt to punish future Albertans with debilitating interest payments.

Smith said the throne speech suggests that won't happen.

"We've got a government that blew through about $17 billion worth of savings that we had (in recent years)," said Smith.

"By 2016, they're set to rack up $20 billion worth of debt. Who knows where the upper limit is?"

After the throne speech, the government also introduced Bill One of the session, to protect private property rights.

Earlier Monday, Prentice, Education Minister Gordon Dirks, Health Minister Stephen Mandel and backbencher Mike Ellis were sworn in as members of the legislature.

They won byelections on Oct. 27.

The session also began with the building under tight security. On the weekend, the government announced new measures following the recent shooting on Parliament Hill.

The iconic front doors of the legislature are now closed and locked. Visitors must pass through a side entrance, where they are subject to security screening and bag searches.